Stockland has announced further progress on its non-core retail divestment strategy, with the unconditional exchange of two retail assets for a combined total of $143 million, reflecting a 2.9% premium to combined book value. Stockland are on track to reach their $400 million target of divestments. 

The divestments relate to a 100% interest in both the Stockland Cleveland shopping centre in Brisbane and the Toowong retail and commercial centre in Brisbane’s southern suburbs, each to private investors. 

Mark Steinert, Managing Director and CEO of Stockland, said: “These transactions take our total asset sales for the current financial year to $256.1 million, representing 64% of our target $400 million of divestments already achieved within the first nine months of the stated 24 month timeframe. 

“These sales align with our strategy to divest non-core assets in a disciplined way, as we focus on recycling capital where expected internal rates of return for divested assets are below our investment hurdle rates. The proceeds of the sales will strengthen our balance sheet, and will be reinvested into our workplace and logistics development pipeline and our securities buyback. It also gives us the flexibility to invest in other opportunities with strong risk-adjusted returns above our hurdle rates.” he said.

“We are committed to continuing to execute our strategy of non-core asset divestment and core asset capital partnering. We are in discussions with potential buyers for a number of additional retail assets within our portfolio.” Steinert said

Louise Mason, Stockland’s Group Executive and CEO of Commercial Property, said: “We continue to strategically reposition our centres, with a focus on customer experience, place-making and retail remixing towards growth categories, to ensure the resilience of our portfolio into the future.” 

Both transactions are expected to settle by 30 June 2019.